8-K: IDACORP Boosts 2025 Earnings Guidance on Strong Q3 Results

IDACORP, Inc. reported increased net income for the third quarter of 2025 and raised its full-year earnings guidance, driven by customer growth and rate adjustments.

Summary

• IDACORP, Inc. reported third quarter 2025 net income attributable to IDACORP of $124.4 million, or $2.26 per diluted share, compared with $113.6 million, or $2.12 per diluted share, in the third quarter of 2024.
• Net income for the first nine months of 2025 increased to $279.9 million, or $5.13 per diluted share, from $251.3 million, or $4.82 per diluted share, in the same period of 2024.
• The company increased its full-year 2025 earnings guidance to a range of $5.80 to $5.90 per diluted share, up from the previous range of $5.70 to $5.85.
• Customer growth added approximately 15,000 new customers, a 2.3% increase, during the twelve months ended September 30, 2025.
• A constructive settlement for the Idaho general rate case is pending approval, proposing an increase of $110.0 million, or 7.48%, in total annual Idaho-jurisdictional revenue, and a 9.6% Idaho-jurisdiction return on equity (ROE).
• Idaho Power expects to use between $50 million and $60 million of additional tax credits available under the Idaho regulatory mechanism in 2025, a reduction from the previously expected $60 million to $77 million.
• Other operations and maintenance (O&M) expenses increased by $4.2 million in Q3 2025 and $22.5 million year-to-date, primarily due to inflationary pressures and increased wildfire mitigation program costs.
• Depreciation and amortization expense increased by $8.1 million in Q3 2025 and $20.3 million year-to-date, driven by an increase in plant-in-service and the start of operations at a leased battery storage facility.
• Non-operating expense, net, increased by $9.8 million in Q3 2025 and $19.0 million year-to-date, mainly due to higher long-term debt balances and increased transmission customer deposits.
• Idaho Power and a developer terminated agreements for a 300 MW owned wind project and a 300 MW PPA wind project due to permitting delays and uncertainty around federal land use policies.

Sentiment

Score: 8

Explanation: The company reported strong financial results, increased its full-year earnings guidance, and reached a favorable rate case settlement. While there are increased expenses and project terminations due to permitting, the overall financial performance and outlook are positive, indicating robust operational execution and regulatory success.

Positives

• Net income attributable to IDACORP increased by $10.8 million in Q3 2025 to $124.4 million, and by $28.6 million year-to-date to $279.9 million.
• Diluted earnings per share increased to $2.26 in Q3 2025 from $2.12 in Q3 2024, and to $5.13 year-to-date from $4.82 in the same period of 2024.
• Full-year 2025 earnings guidance was increased to $5.80 to $5.90 per diluted share from the previous range of $5.70 to $5.85.
• Customer growth contributed $7.8 million to operating income in Q3 2025, with approximately 15,000 new customers (2.3% growth) over the past twelve months.
• A constructive settlement for the Idaho general rate case is pending approval, which includes a proposed $110.0 million (7.48%) increase in annual Idaho-jurisdictional revenue and a 9.6% Idaho-jurisdiction return on equity (ROE).
• The rate case settlement includes authorization to designate all existing ADITCs and those earned through 2028 as eligible for the ADITC and revenue sharing mechanism, with a $55 million annual cap.
• The Idaho ROE floor of 9.12% and sharing level at 9.6% remains in place, with no capital disallowances and no limitation on the timing of filing another Idaho GRC.
• Idaho Power's residential average rates are 30% lower than the national average.
• The Boardman-to-Hemingway (B2H) transmission project broke ground in June 2025, with an in-service date expected in late-2027.

Negatives

• Usage per retail customer, net of associated power supply costs and adjustment mechanisms, decreased operating income by $5.7 million in Q3 2025, primarily due to lower irrigation usage from higher precipitation.
• Other operations and maintenance (O&M) expenses increased by $4.2 million in Q3 2025 and $22.5 million year-to-date, driven by inflationary pressures on labor, professional services, and increased wildfire mitigation program and related insurance expenses.
• Depreciation and amortization expense increased by $8.1 million in Q3 2025 and $20.3 million year-to-date, due to an increase in plant-in-service and amortization of a right-of-use asset for a leased battery storage facility.
• Non-operating expense, net, increased by $9.8 million in Q3 2025 and $19.0 million year-to-date, primarily due to higher long-term debt balances, increased transmission customer deposits, and interest on a new finance lease.
• Idaho Power's hydropower generation guidance for 2025 was lowered to 6.5-7.0 million megawatt-hours from the previous 7.0-8.0 million megawatt-hours.
• The expected use of additional ADITCs for 2025 was reduced to $50 million to $60 million from the previous $60 million to $77 million.
• Idaho Power and a developer terminated agreements for a 300 MW owned wind project and a 300 MW PPA wind project due to permitting delays and uncertainty around federal land use policies.

Risks

• Decisions or actions by the Idaho and Oregon public utilities commissions and the Federal Energy Regulatory Commission that impact Idaho Power's ability to recover costs and earn a return on investment.
• Changes to or the elimination of Idaho Power's regulatory cost recovery mechanisms.
• Expenses and risks associated with capital expenditures and contractual obligations for, and the permitting and construction of, utility infrastructure projects that may be delayed, have cost increases, or may not be deemed prudent by regulators.
• Supplier and contractor delays and failure to satisfy project quality and performance standards on utility infrastructure projects, including impacts of tariffs and permitting requirements.
• Rapid addition of new industrial and commercial customer load and the volatility and timing of such new load demand, potentially exceeding available supply.
• Potential financial impacts of industrial customers not meeting forecasted power usage ramp rates or volumes.
• Impacts of economic conditions, including an inflationary or recessionary environment and interest rates, on operations, capital investments, supply costs, customer demand, and collection of receivables.
• Employee workforce factors, including the costs of attracting and retaining skilled workers, unionization, and adjusting to fluctuations in labor costs.
• Changes in, failure to comply with, and costs of compliance with laws, regulations, policies, orders, and licenses, potentially resulting in penalties and increased costs.
• Abnormal or severe weather conditions, wildfires, droughts, earthquakes, and other natural phenomena, affecting customer sales, hydropower generation, repair costs, and liability for damages.
• Advancement and adoption of self-generation, energy storage, energy efficiency, alternative energy sources, and other technologies that may reduce Idaho Power's sales or introduce operational vulnerabilities.
• Variable hydrological conditions and over-appropriation of surface and groundwater in the Snake River Basin, impacting hydropower generation and power supply costs.
• Ability to acquire equipment, materials, fuel, power, and transmission capacity on reasonable terms and prices, especially during high demand, price volatility, or supply chain disruptions.
• Inability to timely obtain and the cost of obtaining and complying with required governmental permits and approvals, licenses, rights-of-way, and siting for projects.
• Disruptions or outages of Idaho Power's generation or transmission systems or interconnected systems, leading to liability, increased costs, and reduced revenues.
• Accidents, fires, explosions, infrastructure failures, and other unplanned events causing outages, damage, third-party claims, or fines.
• Acts or threats of terrorism, acts of war, social unrest, cyber or physical security attacks, and other malicious acts disrupting operations or compromising data.
• Idaho Power's concentration in one region, exposing it to regional economic conditions and legislation.
• Unaligned goals and positions with co-owners of generation and transmission assets.
• Changes in tax laws, regulations, or interpretations, and the availability of expected tax credits.
• Ability to obtain debt and equity financing or refinance existing debt on satisfactory terms, affected by credit ratings, market volatility, interest rates, and regulatory decisions.
• Failure of risk management and hedging strategies for fuel, power, and transmission.
• Changes in actuarial assumptions, interest rates, and healthcare costs affecting pension and postretirement plan funding.
• Remediation costs associated with the planned cessation of coal-fired operations and conversion to natural gas.
• Ability to continue to pay dividends and achieve target dividend payout ratios, considering financial performance, capital requirements, credit ratings, and regulatory limitations.
• Adoption of or changes in accounting policies, estimates, and new SEC or NYSE requirements.

Future Outlook

IDACORP has increased its full-year 2025 earnings guidance to $5.80 to $5.90 per diluted share, assuming normal weather conditions and power supply expenses for the remainder of the year. Idaho Power expects to utilize $50 million to $60 million of additional tax credits in 2025. The company anticipates continued customer growth and is pursuing other resources to meet capacity and energy deficits following the termination of certain wind projects. The Idaho general rate case settlement, if approved, will provide a significant revenue increase and a 9.6% return on equity, effective January 1, 2026.

Management Comments

• "Continued customer growth and rate changes were the largest drivers of our third quarter results."
• "Financing costs and depreciation expense resulting from Idaho Powers infrastructure investments to safely, reliably, and affordably serve existing customers and meet the demand of our rapidly growing customer needs offset some of those benefits."
• "Weve reached a constructive settlement of our Idaho general rate case, which is now pending approval of the Idaho Public Utilities Commission."

Industry Context

The utility sector, particularly in fast-growing regions like Idaho, is experiencing significant customer load growth, necessitating substantial infrastructure investments. IDACORP's results reflect this trend, with strong customer additions driving revenue. The company's focus on wildfire mitigation and securing regulatory rate increases aligns with broader industry efforts to manage operational risks and ensure cost recovery for essential services and infrastructure upgrades. The termination of wind projects due to permitting challenges highlights the ongoing complexities and regulatory hurdles in developing new renewable energy resources, a common challenge across the industry.

Comparison to Industry Standards

• Idaho Power's residential average rates are 30% lower than the national average, based on Edison Electric Institute data for the 12 months ending December 31, 2024.
• The compound annual growth rate (CAGR) for Idaho Power's total system average rates from 2014-2024 was 1.6%, significantly lower than the national average of 2.9% and the Consumer Price Index (CPI) of 2.9% over the same period.
• Idaho-only residential bills based on 1,000 kWh monthly usage increased on average by 1.24% per year over the past ten years (2015-2025), indicating a slower rate increase compared to broader economic inflation and national utility trends.

Stakeholder Impact

• Shareholders: Positive impact due to increased earnings, higher guidance, and a favorable rate case settlement, potentially supporting future dividends. The equity financing activities (ATM and FSAs) could lead to dilution but also provide capital for investments.
• Customers: Potential increase in electricity rates effective January 1, 2026, due to the rate case settlement, but Idaho Power's rates remain significantly lower than the national average. Continued infrastructure investment aims to ensure reliable service.
• Employees: Increased O&M expenses include inflationary pressures on labor-related costs and higher variable employee compensation, suggesting positive impacts for employees.
• Regulators: The Idaho Public Utilities Commission is reviewing the rate case settlement and will oversee the Wildfire Mitigation Plan.
• Suppliers/Contractors: Ongoing capital expenditures and infrastructure projects indicate continued demand for supplier and contractor services, though project delays can impact specific contracts.

Next Steps

• IDACORP management will hold a teleconference on October 30, 2025, to discuss the financial results.
• The Idaho general rate case settlement is pending approval by the Idaho Public Utilities Commission, with rates requested to become effective January 1, 2026.
• Idaho Power is pursuing other resources to meet capacity and energy deficits following the termination of certain wind projects.
• The Boardman-to-Hemingway (B2H) transmission project is expected to be in-service in late-2027.
• Forward Sale Agreements are expected to settle on or prior to November 9, 2026.

Key Dates

Recommendation

The company delivered strong third-quarter results, exceeding prior year performance, and significantly raised its full-year earnings guidance. The constructive settlement of the Idaho general rate case, pending approval, promises a substantial revenue increase and a healthy return on equity, providing regulatory clarity and financial stability. Despite some operational cost increases and project delays, the underlying customer growth in Idaho Power's service area is robust, and the company's strategic capital investments are progressing. The company's ability to maintain residential rates 30% below the national average positions it favorably for continued growth and customer satisfaction. The combination of strong financial performance, positive guidance, and a favorable regulatory environment makes this a compelling investment opportunity.

Keywords

IDACORP, Idaho Power, Utility, Earnings, Guidance, Q3 2025, Financial Results, Rate Case, Customer Growth, Energy, Electricity, Infrastructure, Renewables, Hydropower, Transmission, ADITC, Capital Expenditures, NYSE: IDA